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Income Statement Sales $12,000,000 Operating Cost excluding depreciation &amortization 6,600,000 EBITDA $5,400,000 Depreciation and amortization 1,200,000 EBIT $4,200,000 Interest 1,080,000 EBT $3,120,000 Taxes (40%) 1,248,000
Income Statement
Sales | $12,000,000 |
Operating Cost excluding depreciation &amortization | 6,600,000 |
EBITDA | $5,400,000 |
Depreciation and amortization | 1,200,000 |
EBIT | $4,200,000 |
Interest | 1,080,000 |
EBT | $3,120,000 |
Taxes (40%) | 1,248,000 |
Net Income | $1,872,000 |
The CEO would like to see higher sales and forecased net income of $3,182,400. Assume that operation costs (excluding depreciation and amortization) are 55% of sales that depreciation and amortization and interest expenses will increase by 5%. The tax rate, which is 40%, will remain the same. (Note that while the tax rate remains constant, the taxes paid will change.) what level of sales would generate $3,182,400 in net income? If necessary, round your answer to the nearest dollar at the end of the calculations.
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